The U.S. Lumber Coalition is disappointed by the London Court of International Arbitration (LCIA) ruling that Canada is not required to continue to apply compensatory adjustments to export taxes under the Softwood Lumber Agreement (SLA), notwithstanding that the adjustments previously awarded by the LCIA for Canadian violations of the SLA have not been fully collected.

In January 2011, the LCIA found that Quebec and Ontario had provided new subsidies to softwood lumber producers in breach of the SLA. The LCIA tribunal determined that additional export taxes on Quebec and Ontario lumber shipments to the United States were necessary to compensate U.S. industry for these violations. The Tribunal expected these export taxes to amount to $59 million by the then-scheduled expiration date of the SLA in October 2013. However, as of mid-2013, less than $20 million had actually been collected.

After the LCIA issued its decision, the United States and Canada agreed to extend the SLA until 2015. At the joint request of the U.S. and Canadian governments, the Tribunal issued today’s clarification that the award of compensatory export taxes was intended to end in 2013, regardless of whether the violations had actually been compensated.

“The Coalition is very disappointed that Canada will not be required to fully compensate U.S. industry for the harm the Tribunal found to be caused by Canada’s violations of our trade agreement,” said Luke Brochu, Chairman of the Coalition and President of Pleasant River Lumber Company in Maine. “For Canada to be allowed to collect export taxes with one hand, then give them back with the other hand through illegal subsidies, and not to pay a penalty for it, seriously undermines our faith in the usefulness of this trade agreement with Canada.”